Correlation Between FTAI Aviation and AerCap Holdings
Can any of the company-specific risk be diversified away by investing in both FTAI Aviation and AerCap Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining FTAI Aviation and AerCap Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTAI Aviation Ltd and AerCap Holdings NV, you can compare the effects of market volatilities on FTAI Aviation and AerCap Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in FTAI Aviation with a short position of AerCap Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Aviation and AerCap Holdings.
Diversification Opportunities for FTAI Aviation and AerCap Holdings
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FTAI and AerCap is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and AerCap Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerCap Holdings NV and FTAI Aviation is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on FTAI Aviation Ltd are associated (or correlated) with AerCap Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerCap Holdings NV has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and AerCap Holdings go up and down completely randomly.
Pair Corralation between FTAI Aviation and AerCap Holdings
Assuming the 90 days horizon FTAI Aviation Ltd is expected to generate 0.46 times more return on investment than AerCap Holdings. However, FTAI Aviation Ltd is 2.17 times less risky than AerCap Holdings. It trades about 0.15 of its potential returns per unit of risk. AerCap Holdings NV is currently generating about 0.05 per unit of risk. If you would invest 2,454 in FTAI Aviation Ltd on August 29, 2024 and sell it today you would earn a total of 334.00 from holding FTAI Aviation Ltd or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTAI Aviation Ltd vs. AerCap Holdings NV
Performance |
| Timeline |
| FTAI Aviation |
| AerCap Holdings NV |
FTAI Aviation and AerCap Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAI Aviation and AerCap Holdings
The main advantage of trading using opposite FTAI Aviation and AerCap Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAI Aviation position performs unexpectedly, AerCap Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AerCap Holdings will offset losses from the drop in AerCap Holdings' long position.| FTAI Aviation vs. Volaris | FTAI Aviation vs. Playa Hotels Resorts | FTAI Aviation vs. American Airlines Group | FTAI Aviation vs. Playtika Holding Corp |
| AerCap Holdings vs. Ryder System | AerCap Holdings vs. Alta Equipment Group | AerCap Holdings vs. PROG Holdings | AerCap Holdings vs. GATX Corporation |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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